The care home means test.

The capital limits

Two thresholds shape the answer. Both apply to the person needing care, not the wider family. They cover savings, investments, and in many cases the value of the property.

These thresholds were last raised in 2010 and have been frozen since. A reform planned for October 2025 would have raised them to £100,000 and £20,000 respectively, but the implementation was deferred and then dropped by the incoming Labour government in 2024.

When the property counts

The value of the home is included in the means test when:

• The person needing care is moving permanently into a care home, and
• The home is not occupied by a qualifying person.

A qualifying person is any of:

• The spouse, civil partner, or unmarried partner of the person needing care
• A relative aged 60 or over, or incapacitated
• A child of the person who is under 18
• A divorced or separated former partner who is a lone parent of a child under 18

Where one of these people lives in the property, the council disregards its value entirely. If they leave the property after the resident moves into care, the disregard ends and the property starts to count.

The 12-week property disregard

Even when the property would otherwise count, the council disregards it for the first 12 weeks of a permanent care home stay. The purpose is to allow the family time to make arrangements without an immediate forced sale. During the 12 weeks the council pays the assessed cost of care.

After the 12 weeks, three things can happen:

1. The family sells the property. The proceeds go into savings and the person becomes a self-funder.
2. The family enters a Deferred Payment Agreement with the council. The council continues paying and recovers when the property is sold, later.
3. The family arranges another way to fund (equity release lifetime mortgage, immediate-needs annuity, draw from other assets). The person becomes a self-funder.

The 12-week disregard is a one-time entitlement attached to the first move into permanent care. It does not refresh.

Tariff income, in plain terms

For people with assets between £14,250 and £23,250, the council does not just take the cash. Instead it treats the “extra” capital above £14,250 as if it produces weekly income at a fixed rate of £1 per £250.

So if your mother has £20,000 in savings, the council treats £5,750 of that (the amount above £14,250) as producing £23 per week of notional income. That £23 is added to her real income (pension etc.) and she is expected to contribute it toward her care fees.

Tariff income is a fiction. The savings do not actually have to earn anything. But the council treats them as if they do, which means savings between the two thresholds get spent down faster than they would in reality.

Personal Expenses Allowance

When the council is paying the bulk of the fees, the resident still keeps a small weekly allowance from their own income to spend on personal items: toiletries, newspapers, clothes. From April 2025 this Personal Expenses Allowance is £30.65 per week in England.

Some local authorities use a different figure called the “income disregard” for residents whose only income is the state pension and pension credit. Practice varies.

Deprivation of assets

One of the most asked questions: “can we just give the house to the children to avoid the means test?” The answer is no, not safely. The council will assess whether assets have been given away “in order to avoid charges”. If they conclude that was the motivation, they can treat the asset as if it still belonged to the person needing care and charge them as if it did. This is the deprivation of assets rule.

There is no fixed look-back period. The council can examine transfers from any point in the past. In practice, transfers made years before care needs were foreseeable are much harder to challenge than transfers made when care was clearly imminent. Reading the case law is depressing for anyone hoping there is a clever way through.

Trusts and similar structures do not escape the rule. The council looks at substance, not legal form. Families who set up complex arrangements for asset protection sometimes find the council pierces straight through them at the point of care needs.

Where NHS Continuing Healthcare sits

None of the means test applies if the person is eligible for NHS Continuing Healthcare. CHC pays the full cost regardless of savings or property. This is why the CHC assessment matters even for families with significant assets: success removes the means test entirely.

See what is CHC and your local ICB approval rate.

Couples

The means test treats each partner’s assets separately for adult social care, which is different from the rule for state pension and means-tested benefits. Where a couple jointly owns assets, half is generally attributed to each. The property is more complicated because the qualifying-occupier disregard still applies. Couples with a single partner moving into care often benefit from getting tailored advice early because the right structuring decisions can shape what counts and what does not.